Costs, Not Fees, Are a Different Animal for Shifting Purposes; Section 998 Given Added Vitality in this Case.
Bates v. Presbyterian Intercommunity Hospital, Inc., Case No. B232731 (2d Dist., Div. 4 Mar. 12, 2012) (certified for publication) is a sad, but interesting, case on whether unilateral fee-shifting provisions--such as those under California’s elder abuse statutes--trump cost-shifting provisions allowable under Code of Civil Procedure section 998, where an elder plaintiff rejects a 998 offer so as to be exposed to cost shifting.
Bates concluded that the elder abuse unilateral fee-shifting provision did not prevent plaintiff from being exposed to a $78,165.98 costs award (mainly expert witness fees) for not beating a defense 998 offer. This was ordained under the reasoning of the California Supreme Court in Murillo v. Fleetwood Enterprises, Inc., 17 Cal.4th 985, 990-991 (1998), holding cost shifting was available against a losing consumer under California’s lemon law who rejected a 998 offer (despite a consumer-oriented fee shifting statute).
However, plaintiff still argued the 998 offer--a defense proposal to waive costs and refrain from pursuing a malicious prosecution claim in return for a “with prejudice” dismissal--was unreasonable and not made in good faith. Wrong, because plaintiff did not meet her burden of demonstrating this was the case. She only presented proof as to why the offer might have been unreasonable closer to trial, rather than what was known when the offer was made as far as reasonableness. (This is important, because the focus is on what was known at the time of the 998 offer, not hindsight or future events occurring closer to trial or an eventual resolution.)
Finally, undesignated experts and pre-offer expert witness fees are within the ambit of section 998, so the mitigating challenges to these costs were unavailing.
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